Bridging Loan Criteria and Eligibility: Who Can Apply?

Aug 25, 2022

George Holmes

George Holmes

Managing Director + Co-Founder

Bridging loans provide you with quick access to large loan amounts, but there is a set of bridging loan criteria you need to meet to be eligible in order to apply. If you’re unsure whether you might be accepted for a bridging loan, read on as we explain everything you need to know about the application process and whether you could be a suitable candidate for secure bridging.

Will I be eligible for a bridging loan?

Bridging loans are generally fairly easy to apply for and receive if you meet the required criteria. Even if you have adverse credit, you may still be eligible to receive a bridging loan depending on the assets you intend to use as collateral and what your exit strategy is. Generally speaking, a bridging loan lender will ask that debt secured through a loan is held against something; typically a residential property, but do also have some specialist lenders that can secure against commercial, B2L and land. If you don’t have any assets to secure your loan against, you will struggle to find a lender who will deem you eligible for a bridge loan as there is no security for them if you default on payments.

Bridging loan lending criteria

Other bridging loan criteria you may need to meet (though it varies from lender to lender), could include:

  • A private individual or limited company
  • Using the loan to fund business endeavours such as buying a property or business equipment
  • A defined exit strategy

The exact criteria for bridge finance will vary depending on the lender, but don’t be put off if you don’t have a good credit history. At Aurora Capital, we work with a range of lenders who offer bridging loans to businesses with poor credit scores, so don’t let that be an immediate put-off.

Due to the short-term nature of bridging loans, you will need a defined and viable exit plan. This typically involves securing a mortgage or longer term type of finance to exit the bridge, alternatively you may be looking to sell the property at the end of the term to repay the facility. This is something to bear in mind, especially if you have poor credit. Being approved for a bridging loan can impact your eligibility for other types of loans moving forwards, so it’s important to think about your future borrowing before committing. This is also why almost every bridging lender will need a detailed exit strategy before approving an application.

What can a bridging loan be used for?

One of the main pieces of bridging loan criteria you need to be aware of pertains to what the loan can be used for. You cannot apply for a bridging loan if you intend to use the money for personal use. Most bridging loans are granted to buy or renovate residential or commercial property that is to be used for business purposes or sold on, but there are other instances in which you can apply. They include:

  • Paying a tax bill
  • Covering everyday business expenses if there’s a cash flow issue
  • Replacing equipment
  • Purchasing new equipment

In most cases, bridging lenders will look at the reason you’re applying for bridging finance and your exit strategy above other qualifying criteria.

Apply for a bridging loan at Aurora Capital

For more information about regulated bridging loans, our bridge finance lending criteria and the application process, please contact us. If you fit the eligibility criteria and are confident a bridging loan could work for you, apply for a bridging loan online and we will match you with a lender.

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